Strategic Consequences Likely from Overthrow of Australian Prime Minister Rudd in Run-Up to General Elections

The rapidly-emerging leadership challenge to Australian Prime Minister Kevin Rudd resulted, in the morning of June 24, 2010, in Mr Rudd refusing to contest the challenge from Deputy Prime Minister Julia Gillard, who was then elected leader of the Parliamentary Labor Party, and therefore, effectively, as Prime Minister. The most significant ramification of the move was not the election of Australia’s first female (and feminist) Prime Minister — serving under Australia’s first female (and feminist) Governor-General — but the election of what is almost certainly the most left-wing head-of-government in the nation’s history. This will have significant, near-term ramifications for Australia’s strategic direction.

Firstly, Prime Minister Gillard has indicated that Australian troops will be withdrawn from Afghanistan sooner rather than later, with the current indication of a withdrawal by 2012, but, more likely much sooner, as the US begins its own withdrawal by 2011 (something possibly accentuated by the dismissal on June 23, 2010, by US Pres. Barack Obama of US and Coalition military Commander in Afghanistan, Gen. Stanley McChrystal).

Secondly, and ironically, Prime Minister Gillard should be expected to minimize, and possibly postpone, the proposal by former Prime Minister Rudd to impose a 40 percent Resources Super Profits Tax on mining companies which provide the central core/stimulus for the Australian economy. The proposed tax immediately drew a halt to all major new investment in the Australian resource sector, and was the turning point in Prime Minister Rudd’s fortunes, enabling the ultra-left faction of the Australian Labor Party (ALP) to move against him. Ms Gillard will need to obliterate the issue which brought Mr Rudd’s, and the ALP’s, popularity into such decline in an election year, even though Ms Gillard is essentially in favor of increasing taxation and penalization of the private sector.

Now, her immediate task is to win the next general election, which must be held before the end of 2010, and the opposition Liberal-National Party Coalition, under Liberal leader Tony Abbott, has been steadily gaining in popularity, particularly in recent weeks. At the same time, however, it seemed unlikely that, even with this swing, Mr Abbott could have unseated a Rudd-led ALP, but the dynamic was enough to cause the Labor left to move against Mr Rudd, who had progressively alienated his Cabinet by authoritarian “rule”.

Thirdly, Prime Minister Gillard should be expected to push strongly for “environmental” legislation, on cap-and-trade taxation and other issues, in the hope of appealing to the left-wing base of the Labor electorate. This will — even absent the Resources Super Profits Tax — continue the Rudd process of alienating inward investment. Within this framework, Ms Gillard is expected to take a line which will appeal strongly to the East Coast electorate, at the continued expense of Western Australia, a Liberal Party state which produces the bulk of Australia’s mineral exports.

Fourth, Australian defense spending is likely to suffer from any protracted term in office by a Gillard Government.

Fifth, Australia’s commitment to its ANZUS alliance with the United States is likely to decline under a prolonged Gillard Government. This will impact on Australia’s significant intelligence exchange relationship with the United States.

Prime Minister Gillard has brought Treasurer Wayne Swan, of the ALP’s moderate wing, into the post she vacated, as Deputy Prime Minister, a move which will in some ways soften the extreme-left image of the new Government. Significantly, when Kevin Rudd — then the opposition Foreign Affairs spokesman — made his own move in late 2006 to topple party Leader Kim Beazley (now Australian Ambassador to the US), Beazley warned Rudd that he, Rudd, did not have enough party support to win the leadership without being beholden to the left-wing faction of the party.

As a result, Mr Beazley resigned and asked his own people to support Rudd, giving Rudd an easy passage to the leadership, and then, following elections against a tired, long-running Liberal Party, the Premiership. But it was still not enough; Rudd had to give the deputy leadership of the party to Julia Gillard, and significant power in the Cabinet to the left faction of the party.

This has finally come to the position where Ms Gillard, using Kevin Rudd’s own autocratic powers of alienation to help his downfall, engineered the triumph of the left in securing control of the Government, a situation which the left could not have achieved on its own in the last election. The question is now whether Ms Gillard can keep her left-wing credentials sufficiently modulated so that she can win a national election in November 2010.

Like British Labour Party Prime Minister Gordon Brown, who also (like Gillard) assumed the Premiership without benefit of a general election, Ms Gillard faces a situation of growing dissatisfaction with her party and rising Opposition fortunes with but a short period for her to remedy the situation before new elections.